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Where Taxpayers and Advisers Meet

Transfer of property to children and loss in value

kebata
Posts: 27
Joined: Tue Feb 21, 2012 7:10 am

Transfer of property to children and loss in value

Postby kebata » Wed Apr 24, 2019 10:52 am

Hello

I am considering transferring my principle residence to my children on which I am likely to have made a capital loss.
I assume the transfer value would be the current valuation, and any gain over that value would be CGT taxable on my children when they come to sell it, as they have other homes. I realise I will have to pay market rent to them to continue to live in the property.
I presume my capital loss could be offset for tax purposes against other capital gains I may have made...………….or can my purchase price be used as the transfer value to my children and for them to use that value in calculating future CGT?


Thank you for your help

kebata

Jholm
Posts: 103
Joined: Mon Mar 11, 2019 4:22 pm

Re: Transfer of property to children and loss in value

Postby Jholm » Wed Apr 24, 2019 1:54 pm

Ignoring any capital enhancement costs.....what is the current value? And, how much did you purchase the property for?

maths
Posts: 7580
Joined: Wed Aug 06, 2008 3:25 pm

Re: Transfer of property to children and loss in value

Postby maths » Wed Apr 24, 2019 3:01 pm

I'm not sure why you wish to make such a transfer?

It's likely that you would be better keeping it and leaving it in your will.

AGoodman
Posts: 864
Joined: Fri May 16, 2014 3:47 pm

Re: Transfer of property to children and loss in value

Postby AGoodman » Wed Apr 24, 2019 3:10 pm

As you thought, the children's cost price will be the market value on the day of transfer.

If the property is/has been your PPR so that a gain would have been free of tax then your loss cannot be used against other gains.

As maths says, transferring your home to children (particularly without proper tax advice) is usually a bad idea - not least because if/when the value increases, the gain is taxable when it would have been covered by PPR. You could also lose the property if a child becomes insolvent, divorces or just plain decides to sell.


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